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What Is Bitcoin ?
In a nutshell, Bitcoin offers a fairer financial system where everyone is equal. At the tap of a button, you can move any amount of money, anywhere in the world—instantly, securely, and typically for micro fees. Let’s explore how it all works: Money that you control Bitcoin is a new type of digital money and, just like with all money, you can store it, exchange it, and make payments with it. However, unlike with traditional (fiat) currencies where payments are controlled by central banks, Bitcoin puts you in full control of your own money. This means you can send, receive, and store any amount of money without relying on financial intermediaries, making bank fees, identity fraud, and delays a thing of the past. Bitcoin’s key features: Decentralized: nobody controls or ‘owns’ the Bitcoin network, and transactions can never be altered or censored. Peer-to-peer: secure payments go directly from one person or business to another, so there’s no need for any ‘trusted third party’ to process payments. Fixed supply: only 21 million coins will ever be created, making Bitcoin much more immune to the inflation traditional currencies are prone to. Low fees: it’s typically much cheaper to move money through Bitcoin’s peer-to-peer network, and transactions are also very fast. Global digital ledger: all Bitcoin transactions are recorded on a global public ledger called the blockchain, and anyone can view them. Why are there different ‘types’ of Bitcoin? At Bitcoin.com, we often use the word ‘Bitcoin’ to refer to both Bitcoin Cash (BCH) and Bitcoin Core (BTC) collectively. Here’s a quick explanation of why the two different digital currencies exist: Open to all Bitcoin is open-source software. This means anybody can propose changes to improve the Bitcoin network and, if these changes are supported by everyone upholding the network, an upgrade takes place. If the proposed changes are not supported by the whole community, an entirely new digital currency may be created from the original coin (called a ‘hard fork’) instead. This is precisely what happened with Bitcoin.Bitcoin Core (BTC) By original design, Bitcoin was built to be an electronic cash system. In other words, it was designed to be used for both big and small global payments—day in, day out. However, when the original digital currency, which is now commonly called Bitcoin Core (BTC), became more popular in 2017, it struggled to meet the demands of a global currency. Transactions were slow, expensive, and sometimes unreliable as the network became ever-busier, so part of the Bitcoin community decided a change was needed. Bitcoin Cash (BCH) To resolve the problem, they suggested that the network should undergo a change which would make it faster, cheaper, and more reliable. In technical terms, this involved increasing the block size to 8MB; in simple terms, this means the number of transactions which can be processed at once increased! However, part of the community rejected the change, leading to a hard fork taking place on August 1st, 2017. During this fork, a new type of Bitcoin called Bitcoin Cash (BCH) was created. Today, Bitcoin Cash (BCH) can meet the demands of a global currency, which is why we support it here at Bitcoin.com. However, you’re always free to use any digital currency you choose to!
Is Bitcoin Good Investment ?
The basics of Bitcoin investment: You can invest in both Bitcoin Cash (BCH) or Bitcoin Core (BTC). They’re two separate digital currencies which can be bought and sold online. There’s no single definition for Bitcoin investment: it depends on what you decide to do. For instance, you might be buying coins to store or trade, or you might try to earn coins by getting involved with Bitcoin mining. As with any type of investment, do your research before spending any money on Bitcoin-related investments and make sure you never spend more than you can afford to lose. Is Bitcoin investment safe? A quick look at our Bitcoin price charts will tell you that both Bitcoin Cash (BCH) and Bitcoin Core (BTC) can have periods of high volatility. That’s because they’re both new investment opportunities and, as market sentiment around the potential of cryptocurrencies fluctuates, so too does the price of every coin within the space. Predicting these periods of volatility is hard even for experienced traders. But, by doing your research and learning about the different types of Bitcoin investment opportunities (and scams), you can make more educated investment decisions. Investing through buying and storing Bitcoin Most new investors simply want to purchase Bitcoin and, once they own it, they store it securely for the foreseeable future (aka ‘hodling’). The goal here is that the Bitcoin bought will appreciate in value and, if this happens, the investor can sell their Bitcoin on for a profit. There is no way to predict whether the Bitcoin you buy will increase in value. One of the biggest factors impacting price is usability, so keep up to date with industry news to learn more about the potential of different cryptocurrencies. To purchase Bitcoin, you exchange fiat currency (e.g. USD) for either Bitcoin Core (BTC) or Bitcoin Cash (BCH). Investing through active Bitcoin trading Trading Bitcoin involves buying either Bitcoin Cash (BCH) or Bitcoin Core (BTC) and, instead of storing it, trading it frequently. The goal here is to buy when the price is low and sell when it rises, meaning a profit is made when the Bitcoin is sold. Bitcoin traders often do this over relevantly short periods of time, closely tracking the market price to determine when to buy and sell. Since there is no way to predict the market, it’s wise to trade with caution and be aware that there are never any guarantees of making a profit. Investing through Bitcoin mining Bitcoin mining involves trying to ‘earn’ Bitcoin Core (BTC) and Bitcoin Cash (BCH) by lending computational power to the networks. In short, when a computer successfully processes Bitcoin transactions, it’s rewarded with newly-created coins—meaning the owner of the hardware earns Bitcoin. To start mining, you can either buy your own mining hardware or you can rent hardware through a cloud mining contract. Either way, joining a mining pool means you’re more likely to successfully mine Bitcoin (i.e. shared efforts for shared profits). The profitability of Bitcoin mining depends on various factors. Above all, the value of the mined Bitcoin needs to be greater than the cost of running the mining hardware for miners to see a profit. Avoiding Bitcoin investment scams As with any financial landscape, the crypto space is rife with scammers looking to take advantage of new investors. As a rule of thumb, any investment opportunity that seems too good to be true probably is. For instance, if a site or company claims it can double your Bitcoin or offers high interest rates if you ‘lend’ them your coins, they’re a scam. Likewise, if you’re unexpectedly approached by somebody out of the blue promising to send you more Bitcoin if you first send them some, ignore it. Many people fall victim to scams—especially when the fraudsters pose as well known figures in the crypto space through fake social media and email accounts. Before committing to any investment, thoroughly research the company or website involved to establish whether they’re trustworthy.
What Is Bitcoin Mining ?
Bitcoin mining is the backbone of the Bitcoin network. Miners provide security and confirm Bitcoin transactions. Without Bitcoin miners, the network would be attacked and dysfunctional. Bitcoin mining is done by specialized computers. The role of miners is to secure the network and to process every Bitcoin transaction. Miners achieve this by solving a computational problem which allows them to chain together blocks of transactions (hence Bitcoin’s famous “blockchain”). For this service, miners are rewarded with newly-created Bitcoins and transaction fees. What is Bitcoin mining actually doing? Miners are securing the network and confirming Bitcoin transactions. Miners are paid rewards for their service every 10 minutes in the form of new bitcoins. What is the point of Bitcoin mining? This is something we're asked everyday! There are many aspects and functions of Bitcoin mining and we'll go over them here. They are: Issuance of new bitcoins Confirming transactions Security Mining Is Used to Issue new Bitcoins Traditional currencies--like the dollar or euro--are issued by central banks. The central bank can issue new units of money ay anytime based on what they think will improve the economy. Bitcoin is different. With Bitcoin, miners are rewarded new bitcoins every 10 minutes. The issuance rate is set in the code, so miners cannot cheat the system or create bitcoins out of thin air. They have to use their computing power to generate the new bitcoins. Miners Confirm Transactions Miners include transactions sent on the Bitcoin network in their blocks. A transaction can only be considered secure and complete once it is included in a block. Miners Secure the Network Miners secure the Bitcoin network by making it difficult to attack, alter or stop. The more miners that mine, the more the secure the network. The only way to reverse Bitcoin transactions is to have more than 51% of the network hash power. Distributed hash power spread among many different miners keeps Bitcoin secure and safe.